Last week, Facebook Inc (NASDAQ:FB) announced new initiatives to monetize Instagram. Facebook bought the photo-sharing platform in 2012 for approximately $1 billion in cash and stock.

Instagram first launched native advertisements last year, though management made sure to tread lightly as to avoid alienating users. Instagram thought it would be most beneficial to focus on user growth before turning attention to monetization through advertisements.

Instagram focused its preliminary advertising efforts on a select group of companies. They integrated carousel ads, as well as photos and videos, to allow brands to showcase a deeper story. Instagram noted in a blog post, “Across more than 475 campaigns measured globally with Nielsen Brand Effect, ad recall from sponsored posts on Instagram was 2.9x higher than Nielsen’s norms for online advertising.”

Now, Instagram is expanding its advertising platform. It will begin offering options for companies to include “action-oriented formats,” meaning the ability for a user to buy a product or service directly from the Instagram advertisement. Instagram will also be working on its ability to allow companies to target which users will see certain advertisements. This will be beneficial to companies that want to filter their advertisements to users with distinct interests or in specific locations, and to users who want to see advertisements congruent to their interests.

Lastly, Instagram will work on making it easier for businesses of all sizes to use Instagram as an advertising platform. Instagram will begin by opening the Instagram Ads API to a small group of the two million companies and agencies that actively advertise on Facebook. Then, Instagram will expand advertising efforts on a global scale throughout the year.

On June 8, Raymond James analyst Aaron Kessler maintained an Outperform rating on Facebook with a $90 price target. Kessler pointed to Facebook’s new initiative to monetize Instagram by “expanding to action-oriented ad formats, enabling more targeting, and opening the platform up to advertisers of all sizes.” Instagram is integrating advertisements with a select group of companies before making it widespread. Kessler believes this method should accelerate growth due to “the expanded advertiser base, improved targeting, and shift to more direct response ads (which drove a significant acceleration in core Facebook in 2013).” Instagram boasts 300 million MAUs and 200 million DAUs, putting an Instagram advertisement space “in high demand.” Kessler notes that there is “indicated significant early client interest since Instagram announced the broader advertiser rollout on Monday. The Instagram announcement increases our confidence in our estimates and Facebook’s ability to expand from a single platform to multiplatform suite.”

Aaron Kessler has rated Facebook 12 times since January 2013, earning a 94% success rate recommending the stock and a +55.7% average return per FB rating. Overall, Kessler has a 57% success rate recommending stocks with a +19.6% average return per rating.

According to Smarter Analyst, Cantor Fitzgerald analyst Youssef Squali also weighed in on Facebook following news that the social media website will monetize Instagram. Squali currently has a Buy rating on Facebook with a $92 price target. The analyst noted, “We view this news as an incremental positive for Facebook, as it signals more aggressive monetization of the 300+M user platform, well before the 1 billion user monetization threshold management has talked about previously.”

Youssef Squali has rated Facebook 25 times since September 2012, earning a 92% success rate recommending the stock with a +53.5% average return per FB rating. Squali has a 73% overall success rate recommending stocks with a +24.8% average return per recommendation.

On average, the top analyst consensus for Facebook on TipRanks is Strong Buy.